Member of the European Commission, responsible for Internal Market and Services

Speech: The Single Market: Europe's path to growth and jobs

Conference “Single Market and Growth in 2013”

The City of London, 1 February 2013

Ladies and gentlemen,

First of all, let me thank the City of London, and Lord Mayor Alderman Roger GIFFORD, for inviting me today.

The EU is making headlines in the UK. And I must say this is not necessarily a bad thing.

Any debate on the EU project is welcome. I have also called for a wide debate in my own country. And I am happy to make my contribution to your debate.

I am not shocked either by the idea of revising the Treaty if it proves necessary.

But any revision should aim at a better functioning union. Not at undermining it.

A piecemeal approach would lead to a major fragmentation of the Single Market, a Single Market which the UK has always strongly supported.

And it would definitely go against the City of London’s interests – 40% of new financial institutions who chose London in the last 7 years did so because of the Single Market.

In the end, it will be for the British people to decide whether they want to stay in the EU. I don't know what their decision will be.

But I know one thing: in a global world, Britain and the other European countries are and will be stronger together.

The EU needs Britain, with its long democratic history, its innovation capacity, its pragmatism, its influence in the world and its great financial centre, the City of London.

And I also believe that Britain needs the EU. Not only because of the Single Market. But also because, faced with new superpowers such as China, Brazil and India, no EU country, be it Britain, France or any other, will exercise sufficient influence alone.

Saying that does not mean that everything is going perfectly in Europe (“swimmingly”, I believe you say).

Growth is still sluggish and unemployment is close to 11% in the EU.

Of course, we need to solve the Eurozone's problems!

While preserving the interests of non-Eurozone countries.

Including the UK.

Of course, we need to make the Single Market better suited to the 21st Century!

Of course, we need to reconnect Europe with the public!

Allow me to come back to these 3 points.

I – First, the Eurozone

Over the last 12 months, we have taken unprecedented steps. Steps that would have been unthinkable just 2 or 3 years ago:

a fiscal compact to put our public finances in order;

the European Stability Mechanism to break the vicious circle between banks

and sovereign debts;

and the supervision of banks by the ECB.

The crisis has confirmed that we cannot have a monetary union without a genuine banking, fiscal and economic union. This is what we are building. Starting with a banking union.

The UK is not part of the euro. And yet, It has supported the creation of a new banking union, while making it clear that it does not want to be part of it. This is its right. And we fully respect this decision.

We are even taking measures to ensure that the new banking union does not undermine the UK’s important role in shaping the rules of the Single Market in financial services.

The European Banking Authority (EBA), based here in London - Adam Farkas, its Executive Director is here today - will remain the forum for coordination of bank supervision and the place where detailed rules are drawn up.

And EBA decisions will have to be approved by a majority of countries outside the Banking Union. This is a strong safeguard.

As Chancellor Osborne often says, Britain will benefit from the return to stability in the eurozone. While remaining in a position to shape Single Market rules together with others.

II – My second point is precisely about the Single Market

Last week, Prime Minister Cameron said that the Single Market remains incomplete in services, energy and the digital economy.

I agree! These are precisely the areas which the Commission has identified as requiring priority action.

We need to upgrade the Single Market. Adapt it to Europe's new economic, technological and social realities. And use it as a foundation to restore growth and create jobs. The Single Market is not the whole economy. But it is its bedrock. If this bedrock is fragmented, any private or public initiative is made less effective.

This is the purpose of the Single Market Act launched by the European Commission in April 2011 with the strong support of Malcolm Harbour, chairman of the IMCO committee in the EP.

With 50 concrete proposals,

12 key actions,

And one method: to find ways to promote growth and jobs in the Single Market. And to implement them.

Some of these proposals have already been adopted. Like the European unitary patent which the UK has opted to join. It will divide the cost of protecting innovation in the whole EU by a factor of 7. And bring direct benefit to our 22 million businesses.

In October 2012, in the second Single Market Act, we presented 12 new priority actions in 4 different fields.

1. First, more integration of European energy and transport networks.

For instance by creating the "Single European Sky".

This will end the fragmentation of European air space.

And reduce costs to airlines and passengers by up to 5 billion euros a year.

2. Second, we want to improve mobility of people and businesses across borders.

I know that there are concerns in some quarters of the UK about the free movement of people.

But it benefits Britain as much as anyone else.

Free movement has enabled 1.5 million British citizens to study and work elsewhere in the EU without requiring a work permit.And it brings skills, experience and money into UK universities and businesses.

Labour mobility is a way to solve the ‘job paradox’ in Europe,with strong unemployment in some areas and labour shortages in others.

We want to encourage mobility. With better recognition of professional qualifications. And the creation of a genuine online European job and placement system and also through the professional card for some professions.

3. Third, we need to build a real Digital Single Market.

We will accelerate the development of a high speed communication infrastructure.

And we will make payment services in the EU more efficient. Today, 35% of internet users do not buy online because of doubts over payment methods.

We will change that.

Building a Digital Single Market also means developing e-government, as the UK has done domestically.

It provides better service to the public. At a lower cost.

For example, we will propose to generalise electronic invoicing for public procurement.

This could save EU companies one billion euros a year.

4. Fourth, the Single Market should be more inclusive.

The EU must also pay attention to social issues if we are to win over public opinion.

Europe must be for people, not just for companies.

For example, social businesses deserve a better place in Europe. We will help them find access to finance with a European framework for social entrepreneurship funds.

All our proposals, Ladies and Gentlemen, are crucial for Europe.

I hope that they will be actively supported by the UK in the Competitiveness Council, which is in fact the Single Market Council.

The UK needs to sit at the table if it wants to influence the outcome of these proposals.

I also count on the UK Government, as on all Member States, to implement rules on the ground.

For example, full implementation of the Services Directive could add up to 2.6 per cent to EU GDP by 2020.

This means we have no choice. We have to look to our Single Market to find 2 to 3 per cent extra growth.

III – Last but not least, how can we reconnect Europe to the people?

First, we have to deliver on our commitments to do what we have decided to do. And show the concrete benefits of Europe.

We need greater progress. Such as a well-working digital Single Market and increased mobility, with the European professional card which I mentioned earlier.

But Europeans also have to realise that the EU is more than just a matter of individual interest, competition and return on investment. Without solidarity there will be no true Single Market. Beware of the rise of protectionism and populism is Europe with the crisis. Their first victim would be the Single Market.

The EU is not only a network. It is a joint project.

The real question is: what do we want to build together?

I welcome the debate on that question. Every European should take part. Be it through meetings at local level, on-line consultations, national Parliaments or MEPs, who are the best placed to represent the people’s interests in Brussels.

I believe we should take advantage of the next European Parliament elections in Spring 2014 to launch this debate.

And I hope that the majority of British people will use the debate to reaffirm their attachment to the European project.

Once again, today we must look the world in the eye and in this world, the British and other Europeans have every interest in staying together.